Dirty Money: Will Singapore Clean Up Its Act?

http://www.spiegel.de/international/world/the-singapore-banking-sector-is-a-tax-haven-that-now-faces-reform-a-930998.html



Singapore has become an increasingly popular haven for money laundering and tax evasion. But now it faces calls for reform and a difficult dilemma: Can it be both a home for fortune hunters and a bastion of integrity?

Dirty Money: Will Singapore Clean Up Its Act?
By Martin Hesse
November 01, 2013 – 06:59 PM

A yellowish-brown fog has settled in the urban canyons of Singapore's financial district. From a skyscraper high above the harbor, you can hardly make out the endless rows of containers in the port terminals. A cloud of smog locally referred to as the "haze" -- caused by the slash-and-burn farming methods of the palm oil barons in neighboring Indonesia -- regularly darkens the skies of the wealthy city-state of Singapore, at the southern tip of the Malaysian Peninsula. But the air has never been as bad as it is now.

Local critics see the haze as a symbol of how nearby filth has dirtied the city-state's business model. The city-state has made itself dependent on global trade, the growth of Asia's rising economies and on the patronage of wealthy people from around the world, who use the discreet financial center as a hub and storage site for their riches.

And now Singapore faces a delicate conundrum: There have been recent signs of crisis in emerging economies like India and Indonesia, and Singapore is under growing pressure from Europe and the United States not to create unfair advantages for itself in the competition among tax havens.

Critical voices are rare in this country accustomed to success, which has almost no unemployment. It has grown steadily for many years in its role as a platform for global companies seeking to do business in Asia while paying little in taxes. The companies produce their goods in the surrounding countries, where production costs are lower.